The UBS Wealth Management and Investment Director's Office published an institutional opinion that opportunities in the Chinese market are expanding and more balanced. Semiconductor equipment in the technology sector is still the first choice, and the upcoming second-quarter results are expected to drive the revaluation of large Internet companies. According to the opinion, the sector rotation in the Asian market is becoming more and more obvious. The market that previously underperformed significantly outperformed other East Asian markets, and the trend of expanding the scope of increase is expected to continue. Profits in various industries have gradually stabilized, and the structural growth logic of AI has not changed. The localization process and demand from domestic hyperscale cloud service providers continue to support the hardware supply chain in China. The upcoming financial report is expected to provide a clearer signal for the Chinese Internet sector, such as whether cloud business growth is accelerating, AI monetization progress, and profit margin trends in core businesses. Continued stock buybacks, potential AI asset spin-offs, and a stabilizing regulatory environment should also help the revaluation of the Internet sector. In addition to technology, they are also optimistic about the electricity and healthcare sectors; banking, insurance, selected utilities, and daily consumption sectors have defensive cash flows and earnings under fluctuating market conditions.

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